IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v198y2021ics0165176520304559.html
   My bibliography  Save this article

Interaction and quadratic effects in probit model with endogenous regressors

Author

Listed:
  • Zhou, Xianbo
  • Li, Heyang

Abstract

This paper proposes a method to estimate the interaction and quadratic effects in probit model with endogenous regressors, which generalizes Ai and Norton (2003)’s study on the interaction effect in nonlinear model without endogenous regressors. The method is applied to estimate the interaction effect of the new-typed information tool usage and social network and the quadratic effect of age on the household risky assets investment, where the bootstrap standard errors of the two effects are provided.

Suggested Citation

  • Zhou, Xianbo & Li, Heyang, 2021. "Interaction and quadratic effects in probit model with endogenous regressors," Economics Letters, Elsevier, vol. 198(C).
    • Handle: RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304559
    DOI: 10.1016/j.econlet.2020.109695
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176520304559
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2020.109695?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James W. Hardin, 2002. "The robust variance estimator for two-stage models," Stata Journal, StataCorp LP, vol. 2(3), pages 253-266, August.
    2. Xiaoyu Chen & Xiaohao Ji, 2017. "The Effect of House Price on Stock Market Participation in China: Evidence from the CHFS Microdata," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(5), pages 1030-1044, May.
    3. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    4. Richard, Patrick, 2019. "Residual bootstrap tests in linear models with many regressors," Journal of Econometrics, Elsevier, vol. 208(2), pages 367-394.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abel Brodeur, 2012. "Smoking, Income and Subjective Well-Being: Evidence from Smoking Bans," Working Papers halshs-00664269, HAL.
    2. Shun-Yang Lee & Julian Runge & Daniel Yoo & Yakov Bart & Anett Gyurak & J. W. Schneider, 2023. "COVID-19 Demand Shocks Revisited: Did Advertising Technology Help Mitigate Adverse Consequences for Small and Midsize Businesses?," Papers 2307.09035, arXiv.org, revised Jan 2024.
    3. Cowling, Marc & Ughetto, Elisa & Lee, Neil, 2018. "The innovation debt penalty: Cost of debt, loan default, and the effects of a public loan guarantee on high-tech firms," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 166-176.
    4. Fernando Rios-Avila & Gustavo Canavire-Bacarreza, 2018. "Standard-error correction in two-stage optimization models: A quasi–maximum likelihood estimation approach," Stata Journal, StataCorp LP, vol. 18(1), pages 206-222, March.
    5. Sonja Fagernäs, 2011. "Protection through Proof of Age. Birth Registration and Child Labor in Early 20th Century USA," Working Paper Series 2311, Department of Economics, University of Sussex Business School.
    6. Hilber, Christian A.L., 2010. "New housing supply and the dilution of social capital," Journal of Urban Economics, Elsevier, vol. 67(3), pages 419-437, May.
    7. Zvonimir Bašić & Parampreet C. Bindra & Daniela Glätzle-Rützler & Angelo Romano & Matthias Sutter & Claudia Zoller, 2021. "The Roots of Cooperation," ECONtribute Discussion Papers Series 097, University of Bonn and University of Cologne, Germany.
    8. Amrei Lahno & Marta Serra-Garcia, 2015. "Peer effects in risk taking: Envy or conformity?," Journal of Risk and Uncertainty, Springer, vol. 50(1), pages 73-95, February.
    9. Hyojoung Kim & Doyoung Kim & Subin Im & James W. Hardin, 2009. "Evidence of Asymmetric Information in the Automobile Insurance Market: Dichotomous Versus Multinomial Measurement of Insurance Coverage," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(2), pages 343-366, June.
    10. Johnston, David W. & Lordan, Grace, 2012. "Discrimination makes me sick! An examination of the discrimination–health relationship," Journal of Health Economics, Elsevier, vol. 31(1), pages 99-111.
    11. Sakaue, Katsuki, 2018. "Informal fee charge and school choice under a free primary education policy: Panel data evidence from rural Uganda," International Journal of Educational Development, Elsevier, vol. 62(C), pages 112-127.
    12. Carolin Bock & Maximilian Schmidt, 2015. "Should I stay, or should I go? – How fund dynamics influence venture capital exit decisions," Review of Financial Economics, John Wiley & Sons, vol. 27(1), pages 68-82, November.
    13. Savage, Michael, 2014. "Smoking outside: the effect of the Irish workplace smoking ban on smoking prevalence among the employed," Health Economics, Policy and Law, Cambridge University Press, vol. 9(4), pages 407-424, October.
    14. Schertler, Andrea & Tykvová, Tereza, 2011. "Venture capital and internationalization," International Business Review, Elsevier, vol. 20(4), pages 423-439, August.
    15. Carolyn Fischer & Richard D. Morgenstern, 2006. "Carbon Abatement Costs: Why the Wide Range of Estimates?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 73-86.
    16. Chenxi Zhou & Jinhong Xie & Qi Wang, 2016. "Failure to Complete Cross-Border M&As: “To” vs. “From” Emerging Markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(9), pages 1077-1105, December.
    17. Gregory J. Colman & Dahlia K. Remler, 2008. "Vertical equity consequences of very high cigarette tax increases: If the poor are the ones smoking, how could cigarette tax increases be progressive?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(2), pages 376-400.
    18. Christopher Mayer & Edward Morrison & Tomasz Piskorski & Arpit Gupta, 2014. "Mortgage Modification and Strategic Behavior: Evidence from a Legal Settlement with Countrywide," American Economic Review, American Economic Association, vol. 104(9), pages 2830-2857, September.
    19. Guy Lacroix & Pierre-Carl Michaud, 2024. "Tax Incentives and Older Workers: Evidence from Canada," Cahiers de recherche / Working Papers 02, Chaire de recherche Jacques-Parizeau en politiques économiques / Jacques-Parizeau Research Chair in Economic Policy.
    20. Janus, Thorsten & Riera-Crichton, Daniel, 2015. "Economic shocks, civil war and ethnicity," Journal of Development Economics, Elsevier, vol. 115(C), pages 32-44.

    More about this item

    Keywords

    Endogenous probit model; Interaction effect; Quadratic effect; Bootstrap standard errors;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304559. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.